April 04, 2005

Tax Battles

I'm only about 100 pages into Death By a Thousand Cuts, but it's already a must-read book, and if I knew the first thing about HTML, I'd put its picture up on the side with a cool banner. Must read! Must read! Ahem. Right…

Anyway, Graetz and Shapiro do the usual riff on how liberals have no organizational heft and conservatives have plenty. Compounding that problem is the fact that one of the few organizational heavyweights that liberals actually have, labor unions, don't do much in the way of political lobbying. Organized labor relies mostly on soft money, PAC contributions, and its ability to turn out millions of voters on election day. But in 2000, unions ranked eleventh out of thirteen sectors in lobbying spending. Agribusiness outspends them, defense contractors outspend them, health, energy, transportation outspend them, etc. etc. etc.

That much is well known. Further compounding the problem, though, is the fact that organized labor really doesn't get involved in tax battles. Now tax issues need to be fought primarily on the lobbying front—it's hard to get workers motivated one way or the other about, say, a capital-gains tax cut—so unions have in effect written this issue off. Graetz and Shapiro note that the AFL-CIO has only one lobbyist responsible for tax issues, David Medina, but he also works on health care, labor law, pension reform, trade, appropriations, education, civil rights, etc. None of this is very likely to change in the near future. The big debate going on right now within the ranks of organized labor is whether to spend more time and money on political activities or more time and money on organizing. And even if the AFL-CIO did decide to devote more money to lobbying, it would still be vastly out-powered by business: "miscellaneous business" spent ten times as much on lobbying as organized labor did in 2000.

Perhaps relying on labor to handle tax legislation is the wrong approach, since they've got plenty else on their plate, and understandably so. Still, there's a glaring asymmetry here and something of a collective action problem. For most tax cuts, the winners are relatively concentrated and can easily mobilize, while the losers are largely diffuse. But it doesn't seem like there will be any fiscal sanity in Washington anytime soon until liberals can figure out how to mobilize over tax issues...